Question
I received 1042-S with income code 15 and in 3a Exemption code 04 and in 4a Exemption code 15. Do I need to pay taxes on my pension?
I left the U.S. in December 2024 and spent zero days in the U.S. in 2025. In 2025, I received payment from my former employer for my remaining paid time off (PTO). They also sent a W-2 to my address in Austria. In addition, I transferred my pension/retirement funds to Austria and received a 1042-S form.
According to my 1042-S form, my pension income should not be taxed; however, my pre-calculated tax shows that I owe $4,808.
Here are the key fields from my 1042-S form:
- Income Code: 15
- Exemption Code (Box 3a): 04
- Tax Rate: 0.00%
- Federal Tax Withheld: $0.00
- Country: Austria
What this means:
- I am tax-exempt in the U.S.
Exemption Code 04 indicates income exempt under a tax treaty. A 0% tax rate and $0 withheld confirm that my pension income was treated as tax-exempt in the U.S. - Income Code 15 = Pension / Annuity
This confirms the income is retirement-related. Under the U.S.–Austria tax treaty, private pensions are generally taxed only in the country of residence (Austria).
Given this, I am wondering why my pension is suddenly being treated as taxable.
